Under a plan proposed by San Diego Gas & Electric, the state could become a bigger player in California’s energy market.

SDG&E wants to stop buying and selling electricity. It expects local governments will begin doing some of that and hopes the state can do the rest. The company wouldn’t go anywhere — it would still own the region’s power lines and deliver natural gas. But a state agency would buy out the power contracts the company already signed and become the backup power provider for customers across the region.

This is the company’s response to the rise of “community choice” agencies, known as CCAs, which give customers the option of buying power from a local government or their local power company. About half of SDG&E’s customers could be buying power in coming years from a CCA.

If SDG&E gets its wish — something that could take years of legislative battling — a constellation of state and local agencies may soon control much of the power bought and sold in California, a major shift away from private companies.

State utility regulators have been struggling to keep up with the CCA movement. In May, the president of the California Public Utilities Commission, Michael Picker, compared what’s going on now to the ingredients that caused the energy crisis two decades ago.

“Fewer and fewer customers are getting power from the traditional large regional utilities and the central decision making that we use for keeping the grid reliable, safe and affordable is splintering, becoming the task of dozens of decision-makers,” Picker wrote in a policy paper.

That helps explain why SDG&E is ready to get out of business of buying and selling power, so it can focus on just delivering other people’s power. It’s losing customers at the same time state lawmakers are continuing to heap responsibilities on power companies, like increasing the use of renewable energy.

Matthew Freedman, a staff attorney for The Utility Reform Network, said the state’s three major power companies — Southern California Edison, Pacific Gas & Electric and SDG&E — are now in a “no-win” situation. Many of their customers are being automatically enrolled in government-run CCAs that compete with them while they are still under pressure from the state to buy more power. If the companies don’t buy more renewables, they get blasted by environmentalists for clinging to dirty fuels; if they do buy more renewables, they get accused by CCA supporters of trying to jack up the “exit fees” that customers have to pay the companies when they leave to join a CCA.

“I think SDG&E doesn’t want to be in that position,” Freedman said. “They don’t want to be told to go buy things the state wants when they are facing a big migration away from their service.”

There are still a lot of unresolved questions to the plan proposed by SDG&E, including who will provide power to customers that live in places without a CCA. Right now, many community choice agencies are in cities, so rural customers — including those in unincorporated San Diego County — could be left without what’s known as a “provider of last resort.” SDG&E’s plan would put that responsibility on the state.

(Disclosure: Mitch Mitchell, SDG&E’s vice president for government affairs, sits on Voice of San Diego’s board of directors.)

Recyclables Gets Recycled Following China Scare

Lots of readers have asked what is happening to San Diego’s recyclable material since China began rejecting recycled material from the United States.

But here’s some good news in San Diego: Recyclables are still getting recycled.

Ken Prue, the city’s recycling program manager, said the city is sending limited amounts of recyclables to China but has also found places willing to accept the material in Korea and Indonesia. Plus, some plastic, glass and aluminum are being recycled at domestic facilities, Prue said.

“Our contractor is taking steps to ensure production of high-quality material to meet stringent market standards,” Prue said in a statement. “The contractor is also continuing to work on identifying additional domestic and international recycling markets.”

$1.4 Billion Approved for Water Recycling Project

The San Diego City Council last week approved a $1.4 billion project to turn wastewater into drinking water. The project, known as Pure Water, will eventually provide a third of the city’s water supply.

The project was accelerated a few years ago because of the drought.

The city’s water department — beset by a year of scandals involving customer billing issues and customer service problems — will be closely watched as the project advances. If something should go wrong, like a drop of unsafe water is served to customers, a generation of recycling projects meant to help California weather future droughts could be thrown into disarray.

Recycled water is already served in some parts of the state, including Orange County, although there the water also filters through the ground, an added level of protection that cannot happen in San Diego for geological reasons.

In Other News

The Washington Post profiles David Bernhardt, deputy secretary of the Department of Interior. Bernhardt, who used to work for the law firm Brownstein Hyatt Farber Schreck, has so many potential conflicts of interest he has to carry a list. His former clients include the Fresno-based Westlands Water District, the controversial Cadiz water project in the desert and Sempra Energy, SDG&E’s parent company. He is prohibited from participating in matters that specifically affect 22 of his former clients until next August, the Post reported. The paper also delved into his work ethic — he spent a vacation reading the legislative history of the Endangered Species Act — but primarily looked at the potential conflicts that arise as a lobbyist-turned-public servant.

A paper co-authored by a local researcher that concluded oceans are warming faster than thought included a major error. (Union-Tribune)